According to AdWeek, Over-the-top (OTT) ad revenue is poised to increase by 15% over the next decade.

In this episode from Season 2 of Paid Media Coffee, we investigate how advertisers can take advantage of the raise in Connected TV as more and more people cut the cord.

Our host Kelly Mancuso welcomes Oliver Brantley, Casey Baker, and Alexa Munoz to walk you through which pitfalls to avoid and the ins and outs of Connected TV advertising. Make sure your coffee is piping hot as you join us today.
 

Kelly: Welcome to Paid Media Coffee. I'm Kelly Mancuso, your host, and today we are taking a deep dive into OTT advertising. I have Nebo's three resident OTT advertising experts with me. First, I have Alexa Muñoz. I also have Casey Baker and Oliver Brantley. Welcome back to the podcast, y'all.

Oliver: Thanks. 

Alexa: Happy to be here.

Casey: Excited to be back.

Kelly: 2019 was a pretty big year for OTT advertising. There were new streaming platforms. Advertising capabilities really evolved, and therefore ad dollars really surged in the area. What specific shifts in the space have been most impactful from an advertising perspective in your eyes?

Oliver: I think the biggest shift this year really has just been kind of the explosion of OTT services. I think for 2019 you know, and before 2019 there was obviously Hulu and Netflix and a lot of streaming services and people really started to move away from linear TV and set top boxes. But in 2019 I think we really saw the proliferation of streaming services becoming kind of widespread and a norm for people in their day to day lives.

Casey: I would piggyback on that and say that a lot of these companies that we've seen merge, so for instance, the Viacom / CBS merger, Roku acquiring the demand side, platform, Data Zoo, I think that those are huge things that happen in 2019 and I think that's something that we'll continue to see into 2020 as a bunch of new platforms also emerge.

Alexa: I agree. I think in 2020, which it's only been about a month in, and we're already seeing consolidations. Tapad and Acuity. Rubicon bought Telaria. I think we're going to start seeing, a lot of these providers start merging with some tech-heavy companies. 

Kelly: Definitely. I agree with that.

Casey: I also think it will be interesting to see all these new platforms that are set to come out in 2020, so we have HBO max, which is set to come out in May 2020, Peacock, which is a big one that everyone's been talking about lately.

That's, that's come out around April, 2020. We have Quibi and then possibly even the Discovery streaming service. I think that'll be really interesting to see how those big names kind of transform the industry.

Alexa: And if they can be successful. Cause right now I think one of the major issues is we're seeing the amount of streaming services that keep coming out is not equal or on par with the amount of cord cutters.

We're still seeing a lot of people have cable. Not necessarily making that switch, but regardless, it's like a new streaming service every month.

Oliver: It's not a one to one ratio of streaming services and new subscribers. It's people that already have a bunch of streaming services just adding the new ones as they come out.

Kelly: Right. You might have a lot more inventory options or places to buy from, but you're not necessarily getting more reach because they use our bases the same, essentially. That's really interesting. Definitely something that we need to think about. But, as we move into 2020, I'm sure as there are new platforms emerging, there's definitely going to be some consolidation in this space or there needs to be at least,

Oliver: And I think kind of along those same lines in 2019, we saw costs decrease a lot for advertisers. More inventory, same reach, and CPMs, really took a nosedive, which is something that we always love to see.

Alexa: It'll be interesting in 2020 like with all these new streaming services to see who can actually make the cut and be successful and who is not going to be successful at all.

I'm most excited about Quibi because they're kind of taking a different stance and being super different, which I think you need to kind of be able to stand out to get consumers. And they're setting themselves apart by being so, Quibi stands for quick bite. What they're doing is that they're only making like short, seven minutes I think is the max, and it's only going to be available on mobile, so you can't stream on any television.

Kelly: Interesting. I know there've been some concerns about mobile inventory in general. Do you think that that's going to steer people away from that platform?

Alexa: I think Quibi is gonna have the hardest time with fraud. Just because it is mobile-only.

Kelly: Alright, well with that let's talk about planning a campaign.

What are some of the specific things that you need to think through when choosing a partner and just planning a campaign in general?

Casey: I would say one of the biggest things is how they get their inventory and making sure that you know exactly how they're sourcing that inventory and what will be available to you. As an advertiser.

Oliver: And like Alexis just said, fraud is a huge problem because especially with OTT ads, you really only get impression data. There's no click-through data and you can't track that activity in Google analytics or anything. It's really important to work with partners that you trust or, make sure you have some way to verify the impressions you're being served.

Alexa: Something interesting that just launched for CTV. DoubleVerify launched a certification program, so you can kind of see if the DSPs are using, has been certified with DoubleVerify for CTV. So far. It's been Amoebee, MediaMath, SpotX, Trade Desk, and Xandr. They're the first to be certified.

Kelly: Okay, definitely look to see if they have that double verify certification and, or potentially other, fraud measurement tools in place.

What other things should we be looking at?

Oliver: I think a cross-screen retargeting capabilities are really important.  Combining display and OTT, being able to serve display ads after a user is exposed to an OTT ad really magnifies that message.

Kelly: And we're seeing that capability for the most part with programmatic partners.

If you're buying through a DSP, that's typically something that you can do. But obviously, we know there are sometimes goals that are more content-focused or awareness focused. You know, I wouldn't say that necessarily would cancel somebody out if they can't do that. If you're looking to have a very specific niche, buy on a certain type of content, you might want to go directly to that publisher to ensure that you're going to align with that content and that audience.

And you might not get those retargeting capabilities. But I think it really comes down to what the goal of the campaign is.

Casey: I would also say with that is, looking at what they can report on what these advertisers can report on. Cause sometimes when you go a little bit bigger with like publishers direct, they don't have as many reporting capabilities.

So kind of like you said, it just really depends on the end goal of the campaign and what the client is looking for.

Kelly: There really are so many partners out there that if you want to run an OTT campaign, where do you start? There's a lot of different technologies and platforms you can go to to access that inventory.

As you're planning, what are some specific red flags that we need to watch out for?

Alexa: One thing I try to watch out for since there are new partners entering the OTT space, almost every day it feels like is if their expertise is in OTT or if it's something that they just kind of tacked on, almost like an add on to their company and they're offering it now because everyone else is.  That's kind of a red flag I try to avoid.

Kelly: Yes. Maybe you can ask how long they've been doing it and if they have any specific recognition for doing that in this space.

Oliver: And then something that's, it's obviously different when you're going publisher direct, but like you said, Alexa, there's so many vendors and a lot of them have very similar pitch decks.

At the end of the day, it's really tough to weed out who knows what they're talking about and who is just kind of spouting out the same things that everybody else is.

Casey: I would say something for me also that specifically a red flag is people that are very pushy and it almost feels like they have an ulterior motive, and that's definitely something that has been a turn off for me.

Alexa: That's what all of her said about how almost all the decks look the same and they're all offering the same thing. I think that goes back to asking the tough questions. To whoever you're working with and making sure they're actually knowledgeable in the space and can answer that and they're not just reading a deck.

Casey: For sure. Cause sometimes you, you get into these tough questions and they answer with like a salesy, automated response and when they can actually answer and have very specific reasons behind questions you ask, I think that's something that is definitely, a huge plus and something that I look for.

Kelly: What are some of those questions that you're asking?

Casey: I would say things about like, kind of what we talked about earlier is like their inventory. How do they source their inventory? What are their retargeting capabilities? How are you protecting against fraud? What's your pricing structure? That's a big one.

How do you report? What does a report dashboard look like? Things like that.

Oliver: And I think also, you know, not a specific question, but when they make claims or say things just to ask them why or to explain further. and I think a big red flag is if a salesperson can't answer most questions in-depth, so if they need to follow up with their tech team on every question…I get, if you're asking something very specific about some functionality or whether or not they can do something, but if their response to every single request for more information, it's just, I need to follow up with the tech team.

That's probably a red flag.

Kelly: What about some other obstacles? We talked a little bit about fraud, but is there anything specific that we can be looking for outside of whether they have a DoubleVerify or similar type of, fraud platform on their side? What are the things that we can look for outside of that?

Alexa: I think. In order to run a successful campaign, you need to be mindful of where your inventory is. I tried to cut back how much of my inventory is running on desktop and mobile. I know that people are streaming on their mobile phones and desktop, but it just opens you up to way more fraud than on a connected TV.

Oliver: And one thing to keep in mind is just the granularity of their reporting. It's really easy to kind of hide fraud if you're not reporting on, super detailed metrics. But if you can't get impressions broken out by device or by network, it makes it a little bit easier to trust what they're saying and what they're reporting is telling you.

Alexa: I mean, even base, I'm Claude. I work with partners who are very transparent because we noticed impressions were coming in for connected TV devices. and then clicks were also coming in. The clicks were the main cause for concern. How is someone clicking on their TV in Hulu, when they shouldn't be able to, and basically it was fraudulent inventory and we're not going to be charged for it.

It's making sure you're actually looking at the reports that you're getting and digging into DCM or wherever your ad server is, and asking those questions.

Oliver: Yet, a lot of times it's not necessarily on the partner. Publishers are the ones committing most of the fraud. And it's really tough for partners to weed that out and it's really tough for us to weed that out through a partner.

I think just keeping on top of things is really important.

Kelly: Cool. We've talked about measurement a little bit as well as terms of measuring the success of a campaign. Obviously that's a huge obstacle in the OTT advertising space. What are some ways that I mean, even though we can't completely overcome it, what are some ways that we can try to embrace the measurement capabilities that are out there today?

Oliver: There's definitely a few kinds of lower-tech sort of old school methods, vanity URLs and tracking phone numbers. Using unique phone numbers for each of your commercials or  OTT spots.

and then a little bit higher-tech or brand lift studies. Post-campaign following up with users who are exposed to your ads and asking them a few questions, one or two questions, working with the vendors on that. But, other than that, measurement is definitely a challenge.

Alexa: If you want to get more tech-heavy, there's a couple of other options. Something that Trade Desk, they can partner with factual GeoPoll measurements and they can measure in-store visits. If you're selling something that is that a retailer, you can geo-fence that retailer and see if someone's seen your CTV ad and if they've gone into the actual location.

Another option out there is that the Amazon DSP will let you attract who's seen a CTV ad and then purchase something through Amazon. But with that, you have to have your products being sold on Amazon.

Oliver: It's very limited use cases for a lot of advertisers. And one thing that a lot of vendors offer is audio listening, and one caveat with that is it's not FTC compliant.

I think right now in the CCPA, GDPR era, things like that are probably not something you want to be doing at the moment. If that changes, and there's a little bit more firm of a legal standing for things like that. Sure. but the moment when something is not FTC compliant, I generally would recommend against using that.

Alexa: Yes, I agree.

Kelly: All right. What about other obstacles? What have we not really gone into yet that you think that we should touch on for our listeners?

Casey: I would say while inventory is kind of a pro, it can also be a con and that lack of high-quality inventory. I think sometimes people forget that two of the biggest players in the CTV space are Netflix and Amazon prime and those services don't support ads within them. I would say that we're still in a place where high-quality inventory and being able to advertise on some of the best inventory is still a challenge.

Oliver: And I think even just personally, I probably spend most of my time on an OTT or streaming OTT content on things like Netflix or HBO Go. Even though I don't have cable and I've kind of cut the cord, the only times I'm really seeing ads are when I'm infrequently watching Hulu or when I'm streaming live sports on ESPN or something like that.

It's generally very specific cases. I spend a lot of time with an OTT and CTV services, but I'm not watching ads when I'm doing that for the most part. My personal inventory is kind of limited to live sports, essentially.

Kelly: That can cause an issue with frequency for sure. Which I think everyone knows that it's definitely a challenge. 

I read a stat from comScore that echoes what you were saying, Casey, four apps make up 75% of the time people spend on connected TV. That's Netflix and Amazon Prime and then followed by Hulu and YouTube. Out of those four Hulu and YouTube are the only ones that you can advertise on.

And the consumption there is also a lot lower than Netflix and Amazon Prime. Definitely something that we need to keep in mind when trying to reach that cord-cutting audience.

Oliver: I mean, at the end of that, I think ads are the number one obstacle to binge-watching. And I probably wouldn't watch nearly as many episodes of anything right in a row if I had to watch a minute and a half ad on Hulu.

Alexa: But I think that's why Hulu is probably the worst offender. I think everyone who watches Hulu knows, it's like you see the same commercial. If you're binge-watching like 10 times. That's super frustrating.

Kelly: All right, so moving outside of obstacles and challenges and red flags, what are some recommendations and best practices that you have for advertisers as they're planning campaigns or running campaigns?

Alexa: The biggest one for me is just aligning with your client on what the main goals of the campaign are and then what is and is not possible to measure out on. Just making sure you're setting that campaign up for success is the first step.

Oliver: I think tempering expectations around measurement are really important.

If you're not going to spend the money on a really complex, high tech measurement tool. Universal pixel or something like that. I would say, just be very clear with the client and with yourself and know that there are certain things that you're just not going to be able to measure accurately.

Kelly: I would say go one step further with that to make sure you're setting those expectations with whatever partner you're working with as well, and make sure that they understand what you and your client have agreed on so that they can make sure that they can deliver on that as well.

Casey: I would say another thing is the creative.

I would say creative is the, by far the most important piece of the whole puzzle and making sure that those creatives are optimized for mobile because that's where a lot of people are watching. And that you really have a strong creative before you go ahead and launch. OTT is a huge thing.

Oliver: I mean, creative is definitely the most important piece cause it's, it's easy for us, I think, especially as paid media professionals just to talk about targeting and reach and all the data-focused things.

But if you're creative as an interesting or short enough to keep people engaged, that's not going to really do much and you're not gonna be moving the needle.

Alexa: And make sure you're making your creative for the devices being viewed on. If you're going to be running a campaign, and it's going to be on desktop, mobile, and connected televisions, then you should at least try to make a mobile-friendly version.

Kelly: We talked about this before we started recording today, how it can be difficult to measure whether your creative is working or not. If you're doing different creative tests because this isn't a medium where you've got view-through rates or click-through rates and things like that.

One thing that you could definitely do is leverage some of those other platforms like social or, display, or video on display too. Get some initial measurement of what creative might resonate a little bit more, and then use that to inform what kind of creative you use on those larger platforms and those larger buys.

Oliver: I think kind of along those same lines, Kelly, I mean, we talked about it earlier, but I think it's really important to remember that cord-cutters are not really growing as fast as streaming services are. I think it's really important to not forget about linear TV if you're, especially depending on your audience. I know we have some audiences that skew older.

Don't assume that OTT and connected TV offerings are going to be a complete one-to-one replacement for any TV buys. Definitely keep your options open when it comes to TV and video.

Alexa: I think that's a good point, Oliver, because there are partners out there that help you measure your impact with linear and OTT, and they'll kind of make sure that you're not cannibalizing each other and you're not showing the same ads as the same person.

If you are going to be on linear and OTT, making sure you're working with a partner that is measuring both.

Kelly: I think that's good too, because like you mentioned, you can use that capability to increase your reach across your audience who might not be on one or the other, but you can also use that to increase your frequency within a smaller group of people who might be viewing both.

You can kind of use it in different ways.

Oliver:  You know, the way I kinda think about that as somebody with a set top box that's watching something on their TV and then they go to the airport and they're streaming content through Xfinity or something on their laptop. We don't necessarily want to just exclude them from your campaign because they're in two different places.

I think again, it goes back to magnifying your message by hitting people in multiple places and multiple different times.

Casey: I think it kinda comes down to what is your ultimate goal? Are you trying to increase your reach? Are you trying to increase your frequency?

And I think there's a huge difference in those.

Kelly: And I would also recommend People not to forget about their first-party data as well. We think about TV advertising as you know, predominantly an awareness tactic, but with a connected TV and with OTT advertising, you can leverage that first-party data and have a really impactful, smaller-scale campaign that's just targeted to your current customers or people on your CRM list. It can be impactful in that way, too.

Oliver: I don't think that's really one of the most valuable things about OTT advertising, in general, is just the personalization and kind of the scalability in terms of using a much smaller scale than you would for a TV buy.

Casey: I was reading an article the other day and it was talking about how it's huge for a lot of these smaller, like retailers, companies such as HelloFresh or Blue Apron where they might not have been able to advertise on linear, just cause of the cost and scalability. They've been really, really successful in the OTT space.

Oliver: The podcast space?

Kelly: All right, cool. 2019 was the year of growth for sure. We touched on that a lot, and I don't think that the growth of OTT advertising is going to be stopping anytime soon. What do you all expect will happen in this space in 2020 and on?

Alexa: I think streaming platforms like Hulu are going to try a little bit harder to prove the value of OTT.

They're definitely rolling out a couple of formats in 2020, which I'm also excited about. Some of them are going to be like, I've seen these before, like kind of choose your own adventure. What kind of ad do you want to see based on this advertiser? and then they're going to have binge ad formats.

You'll be seeing one sponsored ad at the beginning of your show instead of being interrupted constantly.

Kelly: Oliver, I'm sure you'll love that.

Oliver: Give me that choice sometimes. And I make it every single time. It's great.

Alexa: And then the one I'm most excited about is that. If they roll this out successfully, it's going to have QR codes.

You can use your mobile phone to take a quick picture of and then instantly open it up on your mobile device, or it'll give you the option to send more information to your mobile phone or your email that's tied to your Hulu account.

Oliver: That's really cool. I think back in the day, a few years ago, QR codes were seen as just like this, like one-stop-shop.

Like this was the solution for everything. And I don't think it's really worked out that way. People don't seem to be using them as frequently as they were, or we projected that they were. But that is a really interesting thing and I think there's a lot of times where I do want more information on a product, without necessarily having to go to their website.

That definitely makes it a little bit easier to go straight to a landing page. I'm really excited about that, personally.

Kelly: That's cool. That it's something that entices the user because it's engaging and it allows them to get that information, but also from the advertiser perspective, that allows you to connect the dots a little bit better.

So it's a measurement tool as well.

Casey: Something I think we've already seen a little bit of, but we'll continue to see into 2020 is the shift away from a ratings-based system and using GRPs and moving to more of an impression based systems,

Oliver: CPM buying for OTT, and looking at buying TV ads from a CPM perspective rather than buying it on a per slot perspective.

Alexa: I think we're gonna see more consolidations in 2020 a lot more companies partnering just because there's too many in the space and if you want to be successful. I need to find someone to partner with them.

Oliver: It's kind of a standard like a bell curve where right now we're on the upswing, so there's going to be a lot more providers, and then gradually those will start to consolidate and we'll see fewer providers, but at the same amount of content.

Casey: I also think we'll see more of a standardization on how inventory is purchased and then also how we measure things.

Kelly: Hopefully.

Alexa: I would love that.

Kelly: I'm sure there are very smart people working very hard somewhere around the world working to do that. At least we all hope there is.

Casey: I also think, like we kind of talked about, it's not currently a one-to-one ratio with people cutting the cord and new streaming services emerging.

But with that, I think we will kind of see, maybe not even out and be one-to-one, but people are going to continue. I'm cutting the cord in 2020. and I think we'll kind of see where those streaming services and up and if they're going to consolidate and how they. Adapt to the new cord-cutters.

Oliver: No, and I think looking beyond 2020, this is just going to become the norm. Eventually, linear TV will disappear if not only because people are cutting the cord more often, but because traditional cable providers won't be able to continue the scale that they've traditionally operated at, so they won't be able to buy the same amount of content.

Eventually, they're just going to have to shift away from linear TV and into streaming. I think eventually people will be forced to, as there are fewer cable providers, you're going to see more people switching to OTT streaming services just by virtue of necessity. Not just because the cost isn't sustainable, but because there's not as much content and the things they want to see aren't on traditional linear TV providers.

Alexa: I feel like right now, a lot of people I know that still have traditional cable, they only have it because they're basically forced to get it. Like cable internet bundle, but one like it is cheaper for them to get cable and internet bundle than what the company was offering for just internet. They're basically forcing people to have cable.

Oliver: And I think a lot of that is, again, cable providers like Xfinity, just realizing that they need to keep people on their cable if they want to sustain it. And I think right now you're seeing a lot of those people….Xfinity is moving into wireless mobile service, so I think they're realizing that they can't just continue to offer one thing and they're going to have to move into the digital space eventually.

Kelly: Well. Cool. Any other final thoughts from anybody?

Oliver: I am excited for a certain big game next Sunday. It'll be the first time I've ever streamed it rather than watching it on a traditional TV. We'll see how that goes.

Alexa: I'm excited for the big game too. I mean, I love the commercials. I think everybody does.

And something interesting, they just released today. Fox sold out of all their slots, like instantly, like the fastest they have in a very long time. It's been sold out for over two months and because it's such high demand, they just opened up another floater break that they're just hoping there'll be an interruption in the games.

They can play five more commercials.

Kelly: Wow.

Oliver:  That's really interesting.

Kelly:  What about those companies that are buying those floaters spots and spending all the money to produce them.

Alexa: And then maybe it doesn't happen. Like what if there isn't an interruption break?

Oliver:  No interruptions in the game. Totally continuous.

Kelly: But that'd be a good point. We didn't really touch on live TV, and I think that is a huge opportunity for advertisers that they don't think about it as much when planning an OTT campaign, but it's definitely something that you can take advantage of. And then you can buy live TV through Sling.

You know, playing during specific sports games is an option and something that if your audience is there, you should be looking into.

Oliver: Keep in mind the moment there's, there was a certain big game where I did not care about anything that any advertiser was telling me after a certain point in said game.

I think it's important to consider the moment and consider that one team is going to lose in probably a heartbreaking fashion. If you're targeting a certain market with those ads, maybe you have two creatives. One that's exactly a two creatives ready to go, one that doesn't rub it in, and then maybe one that celebrates victory.

Kelly: All right. Great. Well, thank you all for joining me today. I learned a lot about OTT advertising. I hope our listeners did, too. Our next episode is going to be focusing on search. Something we haven't really touched a lot on the podcast so far, and we'll actually focus on search for a few episodes.

So, that will be coming up. And if you have any questions about anything we talked about today or in past episodes. Please email us our email address is paidmediacoffee@neboagency.com you can also tweet at us or follow us on Twitter @paidmediacoffee, and if you liked the podcast, please like it, review it, rate it, subscribe, do whatever you can do to a podcast, and thanks so much for joining us.

We will be back next time.